Vast Resources has pulled out of a deal to acquire Gem Diamonds Botswana (GDB) with joint venture (JV) partner Botswana Diamonds.
GDB’s primary asset is the fully permitted Ghaghoo diamond mine in central Botswana, which is currently under care and maintenance.
In August last year, it was announced that Okwa Diamonds – a JV between Botswana Diamonds and Vast – had conditionally agreed to acquire GDB, a wholly owned subsidiary of Gem Diamonds, for $4-million in cash.
Botswana Diamonds owns a 10% carried interest in Okwa, which it acquired in consideration of the services provided to the JV.
Under the terms of the JV agreement, Vast was responsible for funding Okwa with the first $15-million needed for carrying out due diligence, acquiring GDB and placing the mine back into production.
The completion of the acquisition was subject to a number of conditions – with a longstop date of January 31 – including relevant regulatory and competition authority approvals within Botswana.
Botswana Diamonds said in a statement to shareholders on February 1 that these approvals had been fulfilled. The company said that written approvals had been obtained from Botswana’s Competition Authority and from the country’s Ministry of Mineral Resources, Green Energy and Technology in December.
Vast provided no explanation for the exit to shareholders except to say that the parties were “working together to ensure a mutually beneficial outcome”. Vast added that an agreement had been reached in the interim to extend the longstop date to March 31 to allow Botswana Diamonds to secure an alternative JV partner.
Botswana Diamonds said it had already identified alternative potential partners to replace Vast in the Okwa JV. The company said it had confirmed to Gem Diamonds its commitment to conclude the transaction as originally envisaged as soon as possible.